24 June 2011

Present:

Councillors Sir Simon Day (Chairman), Greenslade, Hannon, McMurray, Moulding, and Pennington

Apologies

Councillor Parsons

*72 Minutes

RESOLVED that the Minutes of the meeting held on 7 April 2011 be signed as a correct record.

*73 Annual Internal Audit Annual Report 2010-11

The Committee considered the report of the County Treasurer (CT/11/3 - text only | pdf | supplementary information CT/11/3) seeking to provide assurance to Members, Executive Directors and the County Treasurer (as the Council's "section 151 responsible officer") on the adequacy and security of those systems on which the County Council relies for its internal control, both financial and management.

It was MOVED by Sir Simon Day, SECONDED by Councillor Moulding and

RESOLVED

(a) that members note the internal audit opinion that the Council's systems contain a satisfactory level of internal control;

(b) that members note the satisfactory performance and achievements of Devon Audit Partnership during 2010/11;

(c) that the Council's continuing commitment to the maintenance and enhancement of an anti-fraud culture be endorsed.

*74 Good Governance in Local Government

The Committee considered the report of the Corporate Leadership Team (CX/11/44 - text onlyCX/11/44) on the Statement required in accordance with CIPFA/SOLACE guidance and in compliance with Regulation 4(2) of the Accounts and Audit (Amendment)(England) Regulations 2006.

It was MOVED by Sir Simon Day, SECONDED by Councillor Moulding and

RESOLVED

(a) that the draft Governance Statement be approved;

(b) that the Chairman of the Audit Committee be authorised to sign the Annual Governance Statement confirming approval by the Committee.

*75 County Council Response to the DCLG Consultation Paper on the Future of Public Audit

The Committee considered the report of the County Treasurer (CT/11/2 - text only | pdf CT/11/2) on the response to the Government consultation on the future arrangements for local public audit. The consultation included proposals relating to the role and composition of the Audit Committee. The deadline for the responses was 30 June 2011 and the report summarised the main issues arising from the consultation and set out a suggested draft response for the Committee to amend and endorse.

The Key issues were:

the imposition of independent but unelected chairman, vice-chairman and members of the Audit Committee;

the potential for over-prescriptive and onerous external audit requirements;

the proposed imposition of the role of commissioner of independent examinations and de facto regulator of smaller public bodies operating within the area of the County.

It was MOVED by Sir Simon Day, SECONDED by Councillor Moulding and

RESOLVED that the response to the consultation set out in Appendix 1 of the report be approved subject to the response being strengthened to include a robust presentation of this Committee s strongly held view that, while it is accepted that independent members may have a role, an audit committee should comprise a majority of members who had been elected and were accountable to their constituents to look after the interests of their community; that there was no justification for independent members carrying out the role of chairman or vice-chairman and that further consideration be given to the way that independent involvement is brought to the selection and oversight of the external auditor, so that it does not jeopardise existing arrangements for wider audit and scrutiny roles currently undertaken by members.

*76 Audit Progress Report

The Committee considered the report of the District Auditor on the audit progress summary to 24 June 2011 setting out reports issued by the Commission since last meeting, work in progress and Audit Commission events and notional reports.

*77 Devon County Council Audit Fee Letter 2011/12

The Committee received the report of the District Auditor on the audit fee for the Commission s work for the County Council in 2011/12. The District Auditor reminded the Committee that the fees were set by the Audit Commission and there was no leeway in the figure stated.

*78 Devon County Council Pension Fund Fee Letter 2011/12

The Committee received the report of the District Auditor on the audit fee for the Commission s work for the County Council s Pension Fund in 2011/12.

*79 School Balances

In accordance with Standing Order 23(2) Councillor McMurray had requested that this item be placed on the agenda.

Councillor McMurray referred to Minute 540 of the Education (Schools) Forum (11th May 2011) - an extract of which is set out below:-

School balances on schools maintained on 1 April 2010 and 31 March 2011 (ie those schools not converted to academies during the year) had increased by 3m ( 11.8m to 14.8m) equating to 3.9% of school budgets. The academies balances would be brought to the next meeting. Provision had been made in the 2011/12 budgets for recoupment on academies, the figures for which were very volatile at present given the rapidly changing number of schools converting.

Councillor McMurray reported that this matter was considered previously by the Audit Committee at its meeting on the 14th December 2009, following a report by the Audit Commission into some Schools carrying forward large sums into the next financial year. Having examined this matter previously, he felt that the Committee should seek a report on why (despite a number of schools converting to Academies), the level of school balances had increased and how that now compared to other authorities.

The Committee considered the report of the County Treasurer (CT/11/5 - text only | pdf | supplementary information CT/11/5) giving an update of the amount of school balances in Devon and a summary of average school balances for Devon, the south west and our statistical neighbours and explains why school balances had increased for 2010/11. Ms Nicola Allen, Principal Finance Manager, attended and spoke to the report and advised Members that an update report would be presented to this Committee in September.

It was MOVED by Sir Simon Day, SECONDED by Councillor Moulding and

RESOLVED

(a) that the position of Devon Schools compared with local authorities in the south west and the statistical neighbours group be noted;

(b) that Members note the continued use of the capping mechanism within DCC.

*80 Date of Next Meeting

The Committee noted that the next meeting would be held on Friday 23 September 2011 at 2.15pm

*DENOTES DELEGATED MATTER WITH POWER TO ACT

The meeting started at 2.15pm and finished at 3.15pm.

The Minutes of the Committee are published on the County Council s Website at:-